Orders of the Day — SOCIAL SECURITY (No. 2) BILL

Part of the debate – in the House of Commons at 6:49 pm on 15 April 1980.

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Photo of Mr Clement Freud Mr Clement Freud , Isle of Ely 6:49, 15 April 1980

I should like to say that I have been here all of the time.

For the uninvolved and the unwhipped, the crucial question about this Bill is whether it is being brought in for financial or for party political reasons. The amount which will be saved, which is really a very unsubstantial amount in comparison with the enormous giveaway to the high rate taxpayers earlier last year, is so small that it makes us believe it is political. If it were money the Government were after, would they not recruit more tax inspectors than social security snoopers? It is quite obvious that political popularity has played a substantial part in this.

I think that historians will look back at this Government and decide that they got it wrong, that they hit the wrong targets. I believe that in clause 6, which perhaps is the crucial clause in this Bill, it would have been a brave move to hit the unions if they wanted to fight. Their fight was with the unions; I do not believe that it was with the dependants, the wives and the children, of those who are in industrial dispute.

It has been the same sort of argument as this Government used when recommending the boycott of the Olympic Games. I am totally in favour of that boycott but not as the only boycott. The boycott by the athletes should have come after the trade boycott, after the export guarantee boycott, after the ending of diplomatic relations. Then by all means let us hit the Russians by boycotting the Games. By the same token, to hit the families of the strikers is the milkman's horse syndrome. I am thinking of the story of a man who found his wife was having an affair with the milkman and went and kicked the milkman's horse.

To go through the clauses very quickly, under clause 1 it is intended ultimately to bring these benefits into taxation. It is argued that the 5 per cent. reduction is an interim measure, but it is purely arbitrary and bears no relation to the kind of tax which a recipient would be likely to pay. It is not altogether clear whether, when these benefits are brought into tax, they will be indexed. I think this point ought to be investigated. The Secretary of State will know that under the tax credit scheme in which my party has always believed none of the credits would be taxable, but under the present arrangement there is a case for taxing short-term benefits. This seems in clause 1 also to mean that a retirement pensioner with no other source of income would receive more than an invalidity pensioner with no other source of income. This is surely wrong and will be enormously difficult to explain to a constituent who raises that point.